Is Disparity of State Domestic Product Stationary in Twenty Indian States?

Abstract

In this paper an attempt has been made to detect stationarity as well as disparity for the State Domestic Product as well as per capita state domestic product for time series data. Data for the purpose has been taken from Handbook of Statistics on Indian Economy (RBI) for the period 1980-2006. The results based on ADF and PP tests reveal that State Domestic Product and per capita SDP on the basis of new series among twenty states are nonstationarity at level and first & second lag. The results here are not consistent with DFGLS (1996) who used detrend time series –based unit root tests and determined that the SDP and per capita SDP for is stationary for the states like Jammu & Kashmir, Karnataka, Tripura and West Bengal. Disparity in term of SDP and per capita SDP for the twenty states under the study period, Gini coefficient and Theils index reveal higher values for per capita SDP. And also stationarity of all the measures of disparity reveals the presence of unit root at level and zero lag.